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NatGas Making Inroads in Michigan

Two weeks after Michigan's governor touted natural gas as a fuel for economic revival, hometown utility Consumers Energy said it is building a 700 MW gas-fired power plant in Genesee County, whose county seat is Flint, birthplace of General Motors. On the natural gas distribution side of its business, the company is laying pipe to serve new customers who've gotten word of cheap gas.

The plant, to be built in Thetford Township, 20 miles northeast of Flint, is expected to cost about $750 million. Consumers Energy owns the 272-acre Thetford Township site, which features access to natural gas pipelines and high-voltage power transmission lines. The site currently is home to nine smaller gas-fired combustion turbine units.

"This proposed plant will use state-of-the-art technology to help meet the future needs of our 1.8 million electric customers in an environmentally responsible manner," said Consumers Energy CEO John Russell. "Vast new supplies of natural gas have reduced prices, and they are expected to stay low for the long term. We selected natural gas as the fuel source for this new power plant because we project it will be the most economical way to serve our customers in the future and continue to bring them value."

Construction is expected to begin in 2015 for in-service during 2017. The plant would generate enough power to serve 445,000 citizens. Consumers needs to obtain an air permit from the Michigan Department of Environmental Quality; a certificate of necessity from the Michigan Public Service Commission; and financing for the project. The utility said its air permit application will support the potential development of a second combined-cycle unit.

Russell said the investment in the proposed plant would be in addition to the $6.5 billion previously planned for the utility operations through 2017. Michigan's 2008 energy law established an energy policy that gives Consumers Energy and other utilities the financial certainty and regulatory structure that they need to make major investments that create jobs and boost the state's economy, he said.

"Michigan has a forward-looking energy policy that is designed to provide families and businesses with the energy and the energy infrastructure they need in the future," Russell said. "Our plan to invest $6.5 billion in our utility, plus another $750 million for this new power plant in Thetford Township, shows that policy is working."

Late last month Gov. Rick Snyder released a 19-page message on energy and the environment in which natural gas figured prominently (see NGI, Dec. 3). "Michigan produces natural gas. It has a lot of places where natural gas can be stored. And it has pipelines built to help move that natural gas," Snyder said. "That's a great advantage and an opportunity for the state of Michigan to do a little of its own economic gardening."

Consumers Energy also is a gas distribution utility, serving more than 1.7 million gas customers in Michigan (half in the Detroit metropolitan area) and operating more than 27,000 miles of transmission and distribution pipelines, as well as gas storage fields with a working capacity of 130 Bcf. More than 90% of the company's gas customers are residential users, and natural gas is the state's primary heating fuel. The news of abundant gas supplies at lower prices has not been lost on customers, Consumers Energy spokesman Dan Bishop told NGI.

"This year we provided natural gas service to 1,300 new customer attachment program customers," he said. "This is an intentional, strategic plan that we're on to work with people that have indicated an interest in getting gas service and developing an appropriate program to lay pipe and to serve them with natural gas.

"We've gotten more aggressive in doing this than previously. Obviously, the market is attractive right now in terms of gas supply. Customer interest is very good, very strong. It's well known that the price of gas is declining. Our existing customers are paying less than they were last winter or previous winters. It's clearly a very attractive fuel as evidenced by our power plant announcement today. There's clearly a lot of good news about natural gas these days."

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